I wondered how come the newly face-lifted 2015 Maruti Suzuki Swift Dzire became India’s “most fuel efficient car” out of the blue. The car, that was launched few days back, comes with the same 1.3-litre MultiJet diesel motor sourced from Fiat. Though Maruti Suzuki has made some technical tweaks with the engines to boost up efficiency, behind the campaign lies what I would call as “diesel woes” – diesel cars are steadily losing their fuel price differential advantage and subsequently sales, thanks to tapering price gap with petrol and deregulation. The Swift Dzire, a best-selling diesel in the segment for several years, is now at a serious disadvantage. There is a undeniable correlation between the campaign, which obviously refers to diesel, and the diesel woes, if at all there is no direct causation.
The new 2015 Swift Dzire gets a nominal facelift and few engine tweaks to enhance mileage. Exterior changes include a thick chrome bar across the grille (like what you find in Alto K10) and new bumpers, fog lamps with the same L-shaped inserts as the new Swift, redesigned alloys for the top-end variants and black inserts in the headlamps. Inside the cabin, those changes from the new Swift are carried forward including the start-stop button, electric ORVMs, Bluetooth audio system, rear parking assistance and new upholstery.
While the car gets the same petrol and diesel engine, the company claims to have performed certain technical tweaks to both the engines in pursuit of enhanced fuel efficiency. The 1.2-litre K-series VVT petrol (84.3PS/115Nm ) engine gets a higher compression ratio and a compact combustion chamber to increase the mileage to 20.85kmpl (up from the earlier 17.94kmpl). While the 1.3-litre MultiJet diesel motor (75PS/190Nm ) has an advanced thermal management system along with engine oil optimised for low friction and modified fuel injection system. In the process, the new Dzire diesel achieves a claimed mileage of 26.59kmpl (up from 23.02kmpl), making it the most fuel efficient diesel car in the country exceeding its bigger sibling Ciaz. These figures are claimed as per ARAI tests, and may not be practically consistent.
Lets come to the crux of our discussion. Walk to any Maruti Suzuki showroom and enquire about existing offers for Dzire sedan, both at company and dealer levels. I did so twice this year, only to find that diesels are slapped with higher discounts, while petrol models get none. This used to be inverse for all these years, precisely before diesel price hikes and advent of other compact sedans like Honda Amaze. The price difference between diesel and petrol is just Rs 10-11 now compared with more than three times that during mid-2012. As a result, the time to recover the premium paid to buy diesel vehicles increases, to more than three and half years from a little over two years in 2012
for an average buyer, according to an analysis done by the ET Intelligence Group.
This trend is not limited to Swift Dzire or Maruti Suzuki. The share of petrol models has expanded to the highest in five years at 62% in December 2014. Tata Motors reports that about 50% of demand for its newly launched Zest coming from petrol-powered versions.
This demand shift towards petrol, perhaps, doesn’t stop with higher discounts on diesel vehicles – from Rs 15,000 on hatchbacks to as much as Rs 1 lakh on midsize sedans. There is also a significant drop in the waiting period that stretched to several months for popular diesel models not long ago. Some petrol models now have a one to-three month waiting period.Now you get better bargains for diesels from almost every compact car sellers.
There are other factors too apart from diesel price deregulation, which is a ticking time bomb as prices are likely to increase once the global oil prices recover back. The 4% excise duty hike from last month has hit the car industry very badly, with prices increasing by a minimum of Rs. 15,000 to Rs. 1.30 lakhs across all range. The price hike is higher for diesel variants due to its overall high cost. This may also affect the customer preferences.
Another factor pertaining to Swift Dzire is stiff competition from rivals. The Dzire is no more the only of its sub-segment (compact sedan). Many new entrants like Honda Amaze, Hyundai Xcent, and Tata Zest are also offering diesel variants competitively, putting Dzire diesel at a serious disadvantage.